Pepper is considered the “King of spices”, which contributes to the worldwide turnover. The traded decision of pepper is largely impacted by the pepper export price. Therefore, the world pepper export price received much attention from importers.
- 1 An overview of pepper export price
- 2 Pepper export price of key players
- 3 Key elements that affect pepper export price
- 4 Top 3 suppliers with a reasonable pepper export price
An overview of pepper export price
Until 2020, pepper prices in the world have decreased for 4 consecutive years and the decrease shows no sign of stopping.
- The price drop in recent times has led to a decrease in the export value of pepper. It is forecasted that from now until the end of 2020, the price of pepper will remain at a low average level.
- Experts have predicted that from the end of 2020, pepper prices will recover when supply and demand return to balance and many businesses will increase buying and hoarding when prices are low.
- In 2021, when the output of other countries slows down, the quality of pepper will be increasingly improved and labor costs will also contribute to pushing up the price of this product.
In the future, the pepper export price will continue to rise due to the restoration of several sectors owing to the remission of the Covid – 19 epidemic stimulating the demand for pepper soaring throughout the festival season. In addition, irregular weather also has a detrimental impact on ready-harvesting crops.
Pepper export price of key players
According to OEC, the top 3 largest pepper exporters are Vietnam, Brazil, and Indonesia. These countries occupied more than 71% of the pepper export share in the world, which dominates the pepper export market.
Vietnam pepper export price
As the world’s leading pepper exporter, Vietnam pepper production has a strong impact on the worldwide pepper price. Generally, the pepper export price of Vietnam fluctuated from 2018 to 2021. The average pepper export price of Vietnam is quite lower than other countries because of product quality and the support from the government.
- In 2019, pepper prices merely fluctuated at the range of 2000 – 2500 USD/MT.
- In 2021, the pepper price surged noticeably and reached its peak. In 11/2021, the pepper export price in Vietnam continued to rise to the highest level in more than 4 years with an average of 4653 USD/ton, an increase of 7.1% over the previous month and 75.8% over the same period last year. This is the highest price of pepper achieved since the price of 4796 USD/ton was recorded in September 2017. (According to IPC) Although the market is quite quiet and the price has slipped far from the mark of VND 90,000/kg as well as the expected level of VND 100,000/kg, in general, 2021 is still a successful year for the Vietnamese pepper industry.
- Regarding the outlook for 2022, experts, businesses, and pepper growers all have the same expectation that the price of this item will continue to increase next year because world consumption demand has increased steadily over the years, while the supply has decreased considerably in recent years. The market gradually returns to the balance of supply-demand, and there may even be a shortage of supply.
Brazil pepper export price
The pepper export price in Brazil also witnessed a fluctuation in the past 3 years. The average pepper export price in 2018, 2019, and 2020 was respectively recorded at 2,835 USD/MT, 2,148 USD/MT, and 2,082 USD/MT. This could be attributed to the world supply of pepper exceeding the global demand in this stage.
- Since 2021, Brazil’s pepper export price had signals of recovery with an average price of 3,187 USD/MT (up to October), an increase of 53% compared to 2020 – the highest in the past 4 years. In total, Brazil exported 80,815 tons of pepper in 11 months of 2021 with a turnover of 260.8 million USD (FOB price). This figure decreased 1.5% in volume but up 56.4% in turnover over the same period of last year.
- Currently, Brazil is the only country with increased supply due to the harvest in the north of the country. All other countries are in short supply. Meanwhile, the situation in Vietnam is quite negative, leading the consumer to buy pepper from Brazil with better freight rates. Consequently, the pepper export price in Brazil increases over time.
Indonesia pepper export price
Indonesia is the 3rd pepper exporter in the world with a total share of export value of pepper up to 12.9% in 2020. The price of Indonesian pepper in the last 3 years has also increased according to the general trend of the whole world. The upward trend started from 9/2020 with only 2525 USD/MT and soon peaked at 5415 USD/MT in 8/2021. This figure was 108% higher than the same period of 2020 and 72% higher than the same period of 2019.
The price of pepper export in Indonesia is due to the shortage of supply and the large stock from speculators. Indonesia shipped 638 tons of pepper valued at IDR 38.2 billion in 63 times its exports from January to April 2019. The traffic of pepper exports from Bangka-Belitung has acquired access to 14 countries, according to the records of the Head of the Agricultural Quarantine Agency. This upward trend is likely to continue as long as farmer productivity rises and price stability is maintained.
Pepper export price forecast
According to research by Fior Markets, the global black pepper market is expected to grow from $3.9 billion in 2020 to nearly $6 billion in 2028, representing an average growth rate of 5.5% over the period. period 2021-2028. The use of black pepper as a health support component has increased in developing countries. In addition, other uses in the cosmetic industry, as the black pepper is useful in skincare formulation, are forecasted to prompt the wholesale black pepper export activities.
The pepper export price in the last 3 years witnessed a continuous increase because it was affected by COVID – 19 pandemic, especially increasing largely in the last 6 months of 2021. Along with supply-demand factors, high production costs (fertilizers, gasoline, freight cost,…), and the new use of pepper will push the pepper prices in 2022.
Key elements that affect pepper export price
Environmental, economic, or political impacts can affect the pepper export price dramatically.
Recently, pepper price has witnessed a surge in price due to the surplus in demand compared to the supply volume. In 8/2021, with the ease of social distancing order in several EU countries, along with demand increases during a special holiday such as Christmas and New Year, the pepper export price has risen significantly.
Production of pepper (MT)
The pepper production volume has reduced because of the impact of the erratic climate in the world’s leading pepper export country such as Brazil, which causes the harvesting season to be postponed. Additionally, the restriction of transportation during the Covid-19 epidemic delayed the sources of pepper to the consumers. As a result, the prices of pepper fluctuated, causing difficulties for traders.
Because goods transit is halted, logistical costs will rise, resulting in a reduction in pepper export volume.
- In the early months of 2020, for example, overall container volumes handled at Chinese ports fell by 10.1 percent, signaling the start of Covid-19.
- Major exporters, such as Brazil, India, and Vietnam, and major importers, such as the European Union, found themselves in the same scenario.
- Every two weeks, the maritime freight routes in Vietnam saw the most dramatic and unexpected growth, with an increase of roughly $1.500-2.000$ for a 40-foot container.
- Additionally, container congestion at ports can cause the scarcity of pepper and reduce domestic purchases. Likewise, the current situation of the “super-economic” cycle forces the U.S and other countries to pump money into the market, which increases the prices of gasoline and gas.
Consequently, the freight costs push pepper export prices.
In the wholesale black pepper sector, the government’s backing is also crucial. Agreements to abolish tariffs, such as SAFTA, EVFTA, and others, lower pepper prices when exchanged and help the pepper sector grow.
Top 3 suppliers with a reasonable pepper export price
Price is an important factor in making decisions when trading. Here are some suppliers that provide high-quality pepper at reasonable prices:
Olam Food Ingredient
Cocoa, coffee, dairy, almonds, and spices are among OFI’s most well-known raw materials and ingredient platforms. Quality, traceability, and risk can all be managed better with comprehensive engagement at every level of the pepper supply chain.
K-Agriculture is among the best Vietnamese agricultural product suppliers. With a 25-year history of delivering agricultural products to the international market, K-Agriculture has become a loyal vendor to large importers in Asia and the EU. The reputation of the company has been proven through high-quality products and reasonable prices.
Established in 1985, Baria Pepper aims to take considerable knowledge of both the product and the local market and use its experience to reach more customers domestically and internationally. Baria’s products have been exported to the Americas, Europe, the Middle East, and other countries in Asia.